Israeli Prime Minister Benjamin Netanyahu on Friday said the Palestinians wanted to form a state devoid of a Jewish population and termed it "ethnic cleansing," drawing sharp criticism from the United States.

In a video message, Netanyahu said in reference to the removal of Israeli settlements in the West Bank, "The Palestinian leadership actually demands a Palestinian state with one pre-condition: No Jews. There's a phrase for that: It's called ethnic cleansing. And this demand is outrageous."

Western-backed Palestinian President Mahmoud Abbas has stated that a future Palestinian state would not permit a single Israeli settler to live within its borders.

After viewing the video clip that was circulated on social media, U.S. State Department spokeswoman Elizabeth Trudeau said at a briefing in Washington that the Israeli leader's words were "inappropriate and unhelpful."

"We obviously strongly disagree with the characterization that those who oppose settlement activity or view it as an obstacle to peace are somehow calling for ethnic cleansing of Jews from the West Bank. We believe that using that type of terminology is inappropriate and unhelpful," she said.

Most countries view Israeli West Bank settlements as illegal and an obstacle to peace. Israel rejects this, saying Jews have been living in the territory for thousands of years.

The Palestinians hope to establish an independent state in the occupied West Bank, which Israel captured in the 1967 Middle East war, along with the Hamas-controlled Gaza Strip and East Jerusalem as its capital.

Trudeau added in her briefing that the United States feels the settlement policy raises "real questions about Israel's long-term intentions in the West Bank."

Last week, after Israel approved the building of 284 new housing units in West Bank settlements, the United States said the policies could expand settlements in a "potentially unlimited way."

U.S. officials said the criticism from the U.S. State Department marked the first time it has suggested in public that Israel may be moving towards unlimited settlement expansion on land the Palestinians seek for their state.

The U.S. officials, who spoke on condition of anonymity, said the latest language was unusually strong but reflected a change in tone rather than any major shift in U.S. policy.